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Rediff.com  » Business » Railway unions seek limit on fare subsidy

Railway unions seek limit on fare subsidy

August 16, 2011 17:46 IST
Expressing concern at the deterioration in railway finances, the two major unions of rail employees have asked the government to limit subsidy on fares to certain classes and to raise fares on the rest.

The National Federation of Indian Railwaymen and the All India Railwaymen's Federation also want a rise in freight rates, barring those on essential commodities.

They want fare subsidies for only those below the poverty line, daily wage earners, senior citizens and students.

Otherwise, they want "rationalisation" (meaning, increase) across all other classes of berths, sleeper and air-conditioned.

"There should be appropriate increase in freight charges (barring those on essentials) to make up for the rising input costs and generate adequate internal resources for investment in railway infrastructure. If the government does not announce a fare hike in the next two months, it might have to take debt of Rs. 2,000 crore," said Shiva Gopal Mishra, general secretary of AIRF.

He said a subsidy of 50 per cent should be available for students, 80 per cent for below-poverty line families and 70 per cent for daily wage earners.

These sections are a third of all travellers in the general/sleeper class.

NFIR says it will ask for talks with Prime Minister Manmohan Singh on fare rationalisation after the current Parliament session concludes.

While hopeful the government would seriously consider these demands, the two unions say they would not hesitate from agitation if proper measures were not taken to strengthen the financial situation of the railways.

NFIR wants to hold a three-hour rally in front of Parliament on September 7, to convey the issue's gravity.

Not less than 20,000 employees are expected to assemble, according to M Raghavaiah, general secretary.

Rail passenger fares haven't been raised for eight years and freight rates have not been aligned to reflect present market conditions.

The operating ratio, which indicates how much is spent for every Rs. 100 of traffic earnings, has risen from Rs. 75.9 in 2007-08 to Rs. 92.1 in 2010-11, pointing to the fact that less and less is left to invest to modernise infrastructure and set aside for the depreciation reserve.

Raghavaiah said the railways had got into a subsidisation trap and had little left over to invest in infrastructure.

It was only adding 450 km of line infrastructure yearly as against the 2,000 km it should add to move in synchronisation with gross domestic product growth, he said.

Freight and passenger earnings contributedĀ  approximately 64 andĀ  28 per cent of gross traffic receipts in 2010-11.

"Despite almost 22 million people travelling on the railways daily, there is a financial crunch and this is due to political indecisiveness that has caused non-revision of passenger fares," said a senior Railway Board official.
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